economic crisis / ecological change

Passive revolution

American Dreams:

Keynesian Fordism as Global Social Compact

.

The Great Depression was the first full-scale crisis of vertically integrated corporate capitalism – an “organic crisis,” as Gramsci would say, because it affected the very organization of social relations. The crash began in the financial sector and it sharply intensified under the pressure of tariff wars and global monetary turmoil. But what it revealed through mass distress – and exacerbated for almost a decade – was a disconnect between the productive and reproductive sectors of society, between industrial growth and human welfare. In the Depression, money was no longer able to fulfill its role as a medium of exchange. Industry was no longer able to provide employment for the workers who had come to depend on it. And the land itself, as the Dust Bowl showed so dramatically, was no longer able to sustain those who lived there. The breakdowns affected the three factors of production known to traditional economics: land, labor and capital. Under laissez-faire economics, with its supposedly self-regulating markets, these fundamental factors had become what the historian and anthropologist Karl Polanyi called “fictitious commodities”: common goods that enter into all production, but whose reproduction is not assured by market relations, and whose replacement or healing costs, absent from the account books, must be borne by institutions based on reciprocity and solidarity. In Polanyi’s view, the roots of the crisis lay in the commodification of the natural environment, the institutions of communication and exchange and finally the body itself, whose existential time was bought and sold with no regard for the consequences. Retrospectively, we can therefore say the Depression was an ecological crisis – like the crisis of the present.

Social movements arose to fill the gaps that unfettered trade had torn in the tissue of human coexistence; and the New Deal articulated those grassroots responses into a political formation that attempted to build countervailing laws and institutions. In this way, American capitalism was “organized at the bottom,” in the sectors of daily life and social reproduction. A similar pattern of organization at the bottom had emerged in the European social-welfare programs of the late nineteenth and early twentieth century; but there, fascism arose to freeze the progressive reforms and maintain the traditional hierarchies. In the US the new arrangements would prove highly dynamic, integrating large numbers of people into an accelerated production regime that restored economic growth while quelling labor unrest. To understand understand the fascination that the Fordist mass-consumption model still exerts all across the world, we have to see how the New Deal both complemented and transformed the profit-generating regime of assembly-line mass production. If the Depression can be considered a “regulation crisis” of organized capitalism, in Michel Aglietta’s phrase, it’s not just because Wall Street needed a few more regulations. It’s because the entire system of industrial society needed to find legal, institutional and cultural limits and counterbalances to the driving forces that had constituted it.

What new class relations emerged in the wake of the New Deal? How did they reshape core functions of the US economy? How did that economy affect the international system into which it expanded so rapidly after WWII? Polanyi’s vision of “freedom in a complex society” entailed the limitation of certain market freedoms in favor of the general welfare. Commodity production, he explained, must be “reembedded” within the mesh of institutional relations that alone can sustain it in reality; and the “great transformation” of society by the self-regulating market must be followed by another transformation, essentially that of social democracy. That was the Western European option, that had been rendered necessary by the anguish of the Depression and the horrors of the war. Domestically, it entailed defensive legislation against the excesses of finance capital, as well as industrial and consumption credits supplied by the state and positive bargaining rights and lifelong entitlements for working people; plus, as the decades wore on, programs for assuring the quality of both urban and natural environments. Internationally, what emerged was a political forum and a military alliance system for territorial security (UN/NATO); a stabilized global currency regime for orderly exchange (Bretton Woods); and a series of negotiated trade barriers that would allow each nation to retain control over the social conditions of commodity production (the GATT, or General Agreement on Tariffs and Trade, which was imposed against US will by countries that needed tariff barriers to reconstruct their industry and agriculture). Thus, it was believed, the classically “liberal” economy of free trade and free circulation of capital could be made to give way to a compromise formation, to which the international relations scholar John Gerard Ruggie gave the name “embedded liberalism.”

For Keynesian reformers inspired by the New Deal, this was the postwar vision. Indeed, when coupled with the prosperity of Fordism it could appear a fulfillment of the “American dream” described by the historian James Truslow Adams in his 1931 bestseller, Epic of America: “that dream of a land in which life should be better and richer and fuller for every man…. a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

Yet social democracy was never realized in the US itself. Instead, from the wartime administration of Roosevelt to Johnson’s Great Society in the 1960s, the reforms conceived for the establishment of a redistributive national capitalism were inserted into an internationalist policy that worked inexorably toward the restoration of free trade, while taking advantage of the delays to restructure the other capitalist democracies. It must be stressed that “free trade” was a misnomer for the complex and original form of imperialism developed by the United States in those years. In fact, American technological and military dominance was used to establish overseas markets for manufactured goods, to install American corporations on foreign soil, to gain and retain control over supplies of raw materials, and as a growth sector in its own right (“the military-industrial complex”). That was the “Fair Deal” that Truman proposed to the postwar world in 1945, shortly after the death of Roosevelt. The question is, why did so many people embrace it? What accounted for the tremendous prestige of the American model of society in the postwar period?

In an impressive analysis, Franz Schurman describes the series of strategic idealizations that transformed the New Deal institutions into an “operational ideology” redefining the promise of the welfare state in the context of the Cold War:

The essence of the New Deal was the notion that big government must spend liberally in order to achieve security and progress. Thus postwar security would require liberal outlays by the United States in order to overcome the chaos created by the war. Aid to… poor nations would have the same effect as social welfare programs within the United States – it would give them the security to overcome chaos and prevent them from turning into violent revolutionaries. Meanwhile, they would be drawn inextricably into the revived world market system. By being brought into the general system, they would become responsible, just as the American unions had during the war. Helping Britain and the remainder of Western Europe would rekindle economic growth, which would stimulate transatlantic trade and this help the American economy in the long run. America had spent enormous sums running up huge deficits in order to sustain the war effort. The result had been astounding and unexpected economic growth. Postwar spending would produce the same effect on a worldwide scale.

Through this operational ideology – which was effectively instituted through capital investment in modernized industry and the transfer of military technology – the contradictory promise of embedded liberalism became a global social compact for the postwar “free world.” To analyze this global social compact I will use the concept of hegemony, as developed by Antonio Gramsci. I will then extend that concept to international relations, following the lead of Robert Cox in his invaluable book, Production, Power and World Order.

Gramsci was a communist seeking change through the development of the productive forces. He was fascinated with the rationalization of labor proposed by Frederick Taylor, and with its ideological expression in the pronouncements and industrial policies of Henry Ford. “In America rationalization has determined the need to elaborate a new type of man suited to the new type of work and productive process,” he wrote in Americanism and Fordism. In his view, the characteristic form of leadership in any era arises at the point of production. This was the specific case of the American industrial system in the 1920s and 30s: “Hegemony here is born in the factory and requires for its exercise only a minute quantity of professional political and ideological intermediaries.”

Gramsci defines hegemony as “the ‘spontaneous’ consent given by the great masses of the population to the general direction imposed on social life by the dominant fundamental group” – a consent which, he remarks, is “historically caused by the prestige (and consequent confidence) which the dominant group enjoys because of its position and function in the world of production.” A productive hegemony can extend from the national to the international scale, leading to a world order. Gramsci asks: “Do international relations precede or logically follow fundamental social relations?” His answer: “There can be no doubt that they follow. Any organic innovation in the social structure, through its technical-military expressions, modifies relations in the international field too.”

Gramsci saw assembly-line manufacturing as an attempt to achieve a higher and more disciplined order of society. Ford himself – representing a populist strain in the US industrial elite – would be no more than a passing phase in this process. It was up to the working classes to “find for themselves an original, and not Americanized, system of living, to turn into freedom what today is necessity.” Yet it was clear that the new productive potentials could easily fail to produce a revolution with an explosive character like that of France in 1789. Instead they could merely update the existing distribution of power, or at best, open up a drawn-out process of “passive revolution” in which progressive vanguards and reactionary forces would vie for hegemony within the hearts and minds of the people. The first two Roosevelt administrations were marked by exactly such a struggle. It was resolved to meet the urgencies of World War II. Keynesian Fordism was the technical and military response to the challenge of the Great Depression. Its international expression gave rise to the world order of the postwar period. Let’s see how that unfolded.

Production Machines

Radical leftist historians in the US are typically attracted by the mass unionism of the Congress of Industrial Organizations and its fiery leader, John Lewis. Maybe the story of the conservative craft union, the American Federation of Labor, with which the CIO ultimately merged, is more revealing. I want to focus on just one detail: a front page article of July 4, 1936. Its two headlines appear totally contradictory: “ERA OF PLENTY FOR LABOR / Market for Man-Hours Grows Less as Technological Displacement Grows Greater.” What exactly is happening here?

As the introductory text explained, the AFL had proposed “an investigation and study of the problem of technological unemployment,” noting that “displacement of workers through the introduction of improved mechanical devices and an extended use of power has been going on at a rapid rate even during the last four years of unemployment.” What followed was the transcript of a long speech by Howard C. Scott, of Technocracy, Inc. – the utopian association of engineers calling for the elimination of the price system, which led, inevitably in their view, to unemployment and economic depression. In response, they foresaw a new era “which will make Communism look bourgeois.” Among the familiar themes of the movement that had been launched some fifteen years before by Thorstein Veblen, one passage stands out, both for its content and its tone:

We technocrats do not run candidates. We believe in organizing the intelligent people along functional lines…. We are not democratic in our methods…. We are looking for those who can take orders or give orders, or both. We are looking for functionally competent people in all lines, people who can contribute effectively toward a continuation of the orderly operation of our equipment, when the present price system…. comes to the end of the road. This is our country, isn’t it? Well, let’s organize it.

For Scott and the Technocrats, the alternative to fascism was “vertical alignment” within a strictly pragmatic organizational structure. Only this, they believed, could deliver the abundance promised by the machine era, despite the certainty of increasing technological unemployment. The irony is that such an organization would in fact arise, it would abolish the price system, and it would deliver its promise to union labor. But it would only do so through the intermediary of a world war.

1935-36 were the years of the “Second New Deal,” including the Wagner Act, the Social Security Act, the Wealth Tax Act and the Works Progress Administration. Roosevelt’s landslide reelection in 1936 established the new Democratic Party constituency of small farmers, immigrant and black workers, intellectuals and inhabitants of the larger urban centers more generally. Yet in 1937, at a point when the economy seemed to have recovered and federal outlays were being scaled back, the US was hit with a fresh recession. To stimulate growth, the government engaged some five billion dollars of new counter-cyclical spending the following year. The policy was successful. This outlay, however, would amount to but a fraction of the money disbursed in the years 1940-41, when the US began arming its allies and preparing for its own entry into war. The achievement of sustained economic growth was not achieved by the New Deal itself, but instead was contingent on the federally orchestrated mobilization of military production. As Keynes himself declared in mid-1940: “It seems politically impossible for a capitalist democracy to organize expenditure on the scale necessary to make the grand experiment which would prove my case – except in war conditions.”

From 1940 onward, and with amazing rapidity, Detroit retooled into the “Arsenal of Democracy” that Roosevelt called for in a famous radio address. The practical and ideological importance of the Ford Motor Co. – whose Willow Run plant produced 8,685 B-24s in the course of wartime operations – becomes abundantly clear in this context. On the one hand, Ford stood for all the innovations of corporate capitalism in the 1910s and ‘20s: the assembly-line process, scientific management, high wages, the moralization of the work force and the exaltation of consumption through advertising, public relations and consumer credit. Ford also represented production capital on a national scale, with all its positive consequences on waged employment, as opposed to the sterile circulation of financial wagers. At the same time, the technological advance of the Ford Motor Co. had immediately pushed it toward massive exportation, then to the establishment of foreign subsidiaries across the earth. Now, under the tutelage of the War Production Board, all these innovations would be subordinated to state planning, price fixing, logisitical control, deficit financing and the legal interdiction of strikes and work stoppages. The entrepreneurial sabotage of production in the search for higher prices, denounced by Veblen way back in 1919, would be halted. The technocratic dream of a functional organization of competent people outside the arbitrary fluctuations of the price system was realized in wartime Detroit. Through similar processes, in industry after industry across the country, the core elements of the postwar Keynesian-Fordist production regime were established during WWII.

During the war, the militarized state assumed direct control over the planning of both innovation and production, by integrating existing corporate resources into national efforts of far wider scope than anything seen before. The continental US was restructured as one great logistical supply chain for multi-theater warfare unfolding across the globe. After 1945, private corporations would pursue this new scale of operations within the regulatory environments and treaty frameworks established by the Roosevelt administrations. The state would continue to furnish much of the capital for such operations.

At the same time as mass production reached unprecedented scale and scope, the innovation system of American industry took a qualitative and quantitative leap forward. Historians of technology, focusing on forty-to-sixty-year “long waves” or “Kondratiev cycles,” have shown that the major crises of capitalism typically produce large backlogs of inventions which cannot be industrialized during the years of economic contraction, but which subsequently provide the technological basis for a new wave of expansionism after the resolution of the crisis. In the case of the US and Britain during WWII, this accumulation of inventions was intensified by the drafting of pure scientists into the war effort under the banner of “operations research,” which has been succinctly defined as “the effective use of scarce resources under dynamic and uncertain conditions.” Unprecedented sums of federal money were funneled to laboratories, which initially tended to be under direct government control, before professional groups secured the “autonomy of science” for corporations and major universities. So-called “big science” was born. The results were prodigious: radar, nuclear fission and the experiments in coding, information transfer and feedback that gave rise to computers and the socio-technical theories of cybernetics. Far from merely perfecting the assembly-line process, the Keynesian Fordism of postwar America would be marked by continuous revolutions in production technology, in fields such as plastics and synthetic fabrics, electronic communications, jet propulsion, space exploration, etc. American society would become technological to the core, with a consequent rise in levels of education and a continuous expansion of the application of science – including social science – to industry and to civil life and consumption. Here, and not in simple manufacturing, lay the sources of that prestige which, as Gramsci understood, stems directly from the forces of production.

To grasp the curve of this development one need only consider the career of Robert McNamara. He was a graduate of Harvard Business School in 1937, served in the Office of Statistical Control of the US Army Air Force during the war, then went on to work at Ford where he took a position in planning and financial analysis, finally becoming president of the company by 1960. In that same year he was invited to join the Kennedy administration as Defense Secretary, and as a true representative of the “best and the brightest” he devoted his lust for efficiency to the Vietnam War before resigning in 1967 and assuming the presidency of the World Bank. Throughout his career, McNamara’s chief contribution was the highly rationalized discipline of systems analysis, derived from operations research and cybernetics, which he used to coordinate industrial and logistical operations at the national and global scales.

Writing two decades after the war in The New Industrial State, John Kenneth Galbraith observed that extended periods of research, development and retooling were required for the assembly-line production of high-technology goods. For this reason, integrated corporate strategies were needed to plan the phases of the work, including sales. The effect was to eliminate the classical figure of the individual entrepreneur, who made cunning use of price information to assemble products from multiple sources on the open market. Instead, quasi-monopolistic corporations turned away from the market and internalized the operations of technological innovation, materials procurement, manufacture, distribution, advertising and consumer credit. To gain further certainty about the conditions of their future sales they fixed prices among each other and relied heavily on the government for contracts that were not subject to the vagaries of consumption by the public. These corporations were governed by hierarchically organized co-operation among large numbers of competent individuals trained in diverse disciplines. In a sense they were not directed by anyone in particular, but continuously steered at every level by the interlocking rationality of their work groups and committees. From Galbraith’s perspective in the 1960s, there was little to distinguish the modern American corporation from its counterparts under Soviet planners: in both cases, control by entrepreneurs and private stockholders had given way to collective management for optimal efficiency. Did the results make Communism look bourgeois, as the Technocrats had promised? Probably not; but it’s clear that after a trial run under government control during the war, the utopian ambition of overcoming the price system was partially realized, at least for a few decades, by the organizational form that Galbraith called “the technostructure.”

Corporate Geopolitics

From the outset, American business elites were aware of the expansionist possibilities offered by the war. The research of Shoup and Minter in Imperial Brain Trust, compiled in the late 1970s using the Freedom of Information Act, has revealed the economic goals established by the Council on Foreign Relations, the publisher of the journal Foreign Affairs. Members of this private-sector club formed a War and Peace Studies Group to issue recommendations to the government, and on that basis were inducted directly into the State Department’s Advisory Committee on Postwar Foreign Policy, whose territorial subgroup was led by the former director of the American Geographical Society, Isaiah Bowman (dubbed “Roosevelt’s geographer” by the Marxist critic Neil Smith). A key question raised during the Council’s preparatory studies – at a time when coexistence with the Third Reich was still considered a possibility – was how to determine the spatial envelope, or “Grand Area,” that would allow the US economy to continue growing after the conflict’s end, without any renewed depression or collapse into the tightly closed currency and trading blocs that had characterized the interwar period. Shoup and Minter’s extraordinary research is so little known that it is worth quoting at length:

A July 24, 1941, memorandum to the President and Department of State outlined the Council’s view of the national interest, describing the role of the Grand Area in American economic, political, and military policy. The memorandum, numbered E-B34, summarized the Grand Area concept, its “meaning for American policy, its function in the present war, and its possible role in the postwar period.” It began by stressing the basic fact that the “economy of the United States is geared to the export of certain manufactured and agricultural products, and the import of numerous raw materials and foodstuffs.” The Economic and Financial Group had found a self-contained United States-Western hemisphere economy impossible without great changes in the American economic system. To prevent alterations in the United States economy, the Council had, in the words of group member Winfield W. Riefler, “gone on to discover what ‘elbow room’ the American economy needed in order to survive without major readjustments.” This living space had to have the basic raw materials needed for the nation’s industry as well as the “fewest possible stresses making for its own disintegration, such as unwieldy export surpluses or severe shortages of consumer goods.” The extensive studies and discussions of the Council groups determined that, as a minimum, most of the non-German world, the “Grand Area,” was needed for “elbow room.” In its final form, it consisted of the Western hemisphere, the United Kingdom, the remainder of the British Commonwealth and Empire, the Dutch East Indies, China, and Japan itself.

The construction of the postwar “Pax Americana” can be seen as the realization of this initial blueprint, under the imperative to contain the Soviet Union. The central elements of the struggle became the Bretton-Woods monetary treaties and institutions (IMF, World Bank); the United Nations Security Council and NATO; the Marshall Plan for European reconstruction; and the remobilization of the US military for the Cold War from 1947 onwards. The last element is key, because remobilization staved off the massive unemployment that would have otherwise resulted from a sudden halt of state spending. The containment policy required not just military force abroad, but also growth at home, in each of the NATO countries. The economy of Pax Americana was therefore heavily militarized. What isn’t sufficiently understood by most people (because this understanding is repressed by most economists and historians) is the degree to which military credits to foreign countries allowed the US to go on subsidizing industrial production at home, while at the same time restructuring the European and East Asian economies despite the opposition of Congress to any prolongation of the Marshall Plan. Aid to the NATO alliance kept American factories booming, while the State Department used its influence to shape European development for US needs, both economic and political. In Asia, the procurement of war matériel for Korea provoked the reindustrialization of Japan, launching what would become the third major pole of the postwar world economy. A passage from Chaos and Governance in the Modern World-System, by Giovanni Arrighi and his collaborators, reveals the perspective of US elites on European unification:

As John Foster Dulles had declared in 1948, “a healthy Europe” could not be “divided into small compartments.” It had to be organized into a market “big enough to justify modern methods of cheap production for mass consumption.” To this end, the new Europe had to include a reindustrialized Germany. Without German integration into the European economy, remarked General Motors corporation chairman Alfred P. Sloan, “there is nothing that could convince us in General Motors that it was either sound or desirable or worthwhile to undertake an operation of any consequence in a country like France.”

Following this logic, Germany became the beachhead for American multinationals exporting to what would soon emerge as the European Economic Community. By 1958 the convertibility of Western European currencies was restored, opening the way to the free circulation of capital. Meanwhile in Asia, the procurement of war matériel for Korea provoked the reindustrialization of Japan, launching what would become the third major pole of the postwar world economy. Outside the industrial democracies, “free trade” under conditions of unequal exchange was imposed by force, against both Soviet incursions and national liberation movements. The list of American interventions after 1945 is long. But the payoffs were enormous. The rise of the Third World developmental state with capital infusions from the World Bank generated huge contracts for American engineering firms specializing in mega-projects like hydroelectric dams, pioneered in New Deal America by the Tennessee Valley Authority. US exports continued to rise: now the giant production complexes modeled after Ford’s River Rouge plant could find secure sources of raw materials, unlimited markets for their manufactures, and boundless geographical space for the expansion of their organizational forms. Employment remained high, and the specter of over-accumulation that haunted US capital in the early twentieth century was held at bay for two long decades.

Corporate planning, federal deficit spending and expansionist diplomacy were the necessary corollaries of the tremendous productive forces that had been released during WWII. But how were these new industrial forces regulated and absorbed on the level of domestic social relations, beyond the emergency stabilization measures of the New Deal? How did Cold War geopolitics affect the US working and managerial classes? And how did the American pattern of production and consumption become the basis for a global social compact?

Era of Plenty

By the late 1930s, the New Deal planners had absorbed the ideas of British economist Keynes, who held that working-class readiness to consume, or “effective demand,” was the crucial factor in investment and therefore in industrial growth. As Keynes wrote in 1936 in The General Theory of Employment, Interest and Money, “Capital is not a self-subsistent entity existing apart from consumption. On the contrary, every weakening in the propensity to consume regarded as a permanent habit must weaken the demand for capital as well as the demand for consumption.” This was, on the face of it, merely a more sophisticated version of the idea that Henry Ford had promoted in the 1910s, namely, that high wages could become the driving force of mass production. Yet Keynes was writing during the Depression, in a context where mass unemployment and no wages had become the driving force of a threatening socialist revolution, which had already been realized in the Soviet Union. Rather than proposing a utopia, Keynes was fighting a battle from within the bourgeois camp, which suddenly appeared to be losing. In the face of the financial elite whom he saw as the enemy of production and employment, Keynes proposed that the government should bank on, and encourage by every means possible, the will-to-spend. Generations have looked to The General Theory as a recipe for salvation. The first writer on the Left to perceive it as a formulary of struggle was Antonio Negri.

Writing in Italy in 1968 when the compromise of embedded liberalism had already become insufferable (even before the “historic compromise” of the Italian Communist Party and the Christian Democrats), Negri’s basic idea was simple: the counter-cyclical spending of the welfare state represents the recognition of the Bolshevik revolution as a threat to capital – a threat embodied in the revolutionary potential of every worker. The initial response was technological: Taylorist deskilling and the implacable discipline of the assembly line, under the gaze of a growing managerial class of engineers. Yet despite Ford’s efforts with the sociology department, this response could not address the workers in their off hours, when they left the factory – to go home, to organize, to get educated or simply to engage in leisure time. The definitive response would be the inclusion of workers as fundamental political actors within the capitalist economy, where through successful relations of labor struggle and collective bargaining they became the source of “effective demand” for industrial production, and therefore, the motor of continued investment. Yet this inclusion does not eliminate workers’ antagonism. For Negri, the attempt by capital to use managed demand for consumer products as a way to smooth out the boom-bust cycles of the laissez-faire economy, and thereby attain equilibrium, is an impossible quest to contain the threat “at ever new levels.” The core argument of Negri’s text, “Keynes and Capitalist Theories of the State Post-1929,” is found in a single paragraph:

With Keynes, capitalist science takes a remarkable leap forward: it recognizes the working class as an autonomous moment within capital. With his theory of effective demand, Keynes introduces into political economy the political notion of a balance of power between classes in struggle. Obviously the ideological (but also necessary) aim of Keynes’ argument is towards shoring up the system: for Keynes the problem is how to establish a balance of effective demand, in a context where the various balances of power making up effective demand are conceived as unchanging. But this political objective – which would require working class autonomy to be forever constrained within a given existing power structure – is precisely the paradox of Keynesianism: it is forced to recognize that the working class is the driving motor of development, and that therefore Keynes’s statically defined notions of equilibrium can in fact never be attained in static terms. Any attempt to define an equation of static equilibrium is, and will remain, a laborious search for equilibrium within what has to be a developing situation. In effect – as Keynes appears to recognize – the system functions not because the working class is always inside capital, but because it is also capable of stepping outside it; because there is the continual threat that it will in fact do so. The problem for science, and the aims of politics, must be to contain and absorb this threat, this refusal, and absorb it at ever new levels. How, and what next? Capital must ensure that the dynamic factors of growth are controlled, in such a way that the balance of power remains the same.

From this perspective, the social history of the national welfare states represents an internalization of the Cold War. By recognizing workers as an internal danger, and by continually responding to the tension of this existential threat with entitlements and monetary payoffs that boost the propensity to consume, the capitalist system loops its own loop. It assures, not only the realization of profit through the sale of goods, but also the legitimacy of the system as the vector of progress, defined exclusively as a rising standard of living. As the black autoworker James Boggs shows in his text on “The Rise and Fall of the Union,” an era of plenty for labor was in fact attained despite rapidly advancing automation, but only for an ever-shrinking number of union-affiliated personnel. The price of this prosperity was that all claims to the improvement of working conditions and to shopfloor autonomy in the organization of production had to be gradually abandoned in favor of wage bargaining alone; so that after the war, the great days of sit-down strikes and CIO agitation among black and immigrant workers were over. They were replaced by an unprecedented outflow of material goods and the accession of simple laborers to the ownership of private cars and houses in the suburbs. Thus the successful resolution of the domestic struggle between labor and capital became the foundation stone of a larger promise, which was that of winning the Cold War. Every state-funded highway, educational program, unemployment check, B-52 bomber or automobile purchased on credit was proof that the system works, and a tangible victory over the Soviets, as it had earlier been over the Nazis. This tangible institution of state-orchestrated productivity was the “operational ideology” analyzed by Franz Schurmann. Within such a framework, Keynesian-Fordist social relations could be extended as the cornerstone of postwar reconstruction in the advanced industrial democracies and, more tenuously of course, as the promise of development in the recently decolonized countries. Yet the solution could only be maintained if the returns of economic growth were each time greater in the advanced economies – and if the tantalizing promise of development could each time be re-inflated with the loans and mega-projects of an essentially ideological modernization of the Third World. The spiraling dynamic that Negri describes was the engine of global capitalist expansion in the postwar period.

The new attention that the system paid to the consumer was, of course, obvious to everyone. Galbraith, in his attempt to analyze the corporate planning system and kill all the sacred cows of classical economics in a single blow, devotes some particularly sarcastic pages to what he calls the “revised sequence,” where consumer choice does not originate with the sovereign individual, but rather is installed in him or her by the advertising department of the firm, so as to insure that there will be an effective demand for each new product line. The looping structure of feedback, characteristic of the way cybernetic theory conceived the relation between purpose, behavior and goal, reappears here at the heart of the economic equation. The worker/consumer was expected, at best, to be a faithful relay in the loop between production and renewed investment, which meant that he or she should act on the desires instilled by a crucial device, itself a primary household commodity: namely, the dream machine called a TV set. However, in the event of a mismatch between product and desire, an adaptive informational link was installed in the form of the Nielsen rating system, which could gauge the performance of televisual conditioning and relay any dissatisfaction with either the entertainment programs or the advertisements for the commodities. In this way the “strategy of desire,” propounded in a foundational book by the Madison Avenue mastermind Ernst Dichter, could be fulfilled to perfection. Similar advertising and polling arrangements were extended to electoral politics, so as to simplify and render ever more predictable the social environment in which the corporations did their business. In this process, the Republicans ended up trading on fear and the image of tough anti-Communism, while the Democrats, who in fact were more likely to go to war, sold their candidates on agreeable promises of welfare, urban renewal and educational reform. The American dream, at this point, seemed to have migrated into the infantilizing phantasmagoria of television, even as its philosophical content was reduced to the rigid logical structure of an electronic circuit diagram.

The society of the spectacle, which Guy Debord and the Situationists denounced in France, obviously reached its highest level of development in the USA. But along with the entire panoply of Keynesian-Fordist planning techniques it also spread from the US throughout the world, as the glue of social desire that held the loops of the feedback economy together. Much of the New Left, in the sense that applies to the whole range of thinkers and political movements that became visible in 1968, would understand Keynesian Fordism as a totalizing system: a welfare-warfare state with no outside and no remainder. For Herbert Marcuse, the most significant revolutionary philosopher in America, this totality could only be shattered by the force of distant Third World revolutions, or by the internal subversion of a lumpen subproletariat. Negri’s rather different position was that the internal problem of working class antagonism could never be resolved, only postponed. As he wrote: “Looking closely, one can see that capitalism’s dynamism at this point only results from a continuous struggle, in which the thrust of the working class is accepted, and new weapons are forged in order to prevent the class acting outside capital, and to make it act within a framework whose outlines are continually being drawn anew.” The extraordinary growth of welfare payments and entitlements through the Johnson administration’s Great Society programs, carried out at the same time as the escalation of the war in Vietnam, must have appeared a prime example of this continuously expanding framework of containment and struggle.

The question that then arose, and that became the burning issue for the revolutionaries of 1968, is how, through which objective acts and on the basis of which subjective resources, could living labor elude and destroy the strategies that continually seek to draw it back into the spiraling dynamic of economic growth that defines the social containment strategy of Keynesian Fordism? How, in other words, could the Left reformulate itself to gain autonomy from a seemingly all-inclusive system that had structured itself around the threat that the working class posed to capital? In the next text I will argue, against the thesis of a totalizing welfare-warfare state, that initial answers to those questions had already appeared within the institutional structures of the developed societies in the years leading up to 1968; that these institutional changes made possible new openings to cultural contexts outside the integrated system of consumer capitalism; and further, that the internalized cultural contradictions resulting from those openings were what precipitated the extended social and economic crisis of the 1970s and led ultimately to a sweeping change, for better and worse, in the global social compact and the class structure of the industrial democracies. In short, I will argue that a new egalitarian aspiration, no longer specific to the United States and no longer reducible to the programmed feedback loops of televisual spectacle, took shape within the expanded geographical envelope of Keynesian Fordist hegemony and tore that hegemony apart, opening up the new threats and the new reactionary strategies that have animated the neoliberal system right up to the present period of crisis.

Hegemony and Dreamwork

The idea I’ve been developing here (inspired by Robert Cox) is that a particular relation between labor, technology, management, domestic social institutions and international monetary/military protocols – forming what Armin Medosch and myself call a “technopolitical paradigm” – can provide the foundations of a global hegemony in the full Gramscian sense: that is, a systemic order lived as a commonsense framework of daily practice and as an open horizon of cultural potential. The Keynesian-Fordist compromise as it developed in the US, first with the New Deal, then in the struggle with the Axis powers and the specular rivalry with the Soviet Union, ultimately became such a hegemony, everywhere developing a productive tension between national industrial capital and export-oriented liberalism. The broad contours of this hegemony can be traced, its geography explored, its limits established, its variations enumerated in progressively finer detail; and closer analyses of particular countries and classes would certainly reveal historical entanglements that defy the synthetic powers of any all-embracing theory. What would be most interesting, I think, would be to engage a series of dialogues to explore when the hegemony developed in different places, where it proved weaker or more robust, how it transformed previous social relations and why it broke down or miserably failed. While awaiting such exchanges, I’d like to ask one further question, which concerns the subtler issue of how all the far-flung components of a global hegemony make it under an individual’s skin – and what kinds of psychic stress and displacement such a process must entail. Anthropologists, of course, have written of this pseudomorphism in terms of “acculturation.” But how does such a process occur at the foundational moments, when there is as yet no fully developed culture to which one could be acculturated? How, in other words, is a hegemony forged by those who will become its subjects?

The art historian Peter Wollen has offered a searching essay about exactly such a process, under the ironic title “The Triumph of American Painting.” Wollen retraces the formative years of Jackson Pollock and the pathways that led him to worldwide recognition as the premier Abstract Expressionist. What emerges from the text is a vast and forgotten world, that of a Communist sympathizer who came to adulthood in the Depression, a rebellious guy with a mystical bent, on the margins of society, prone to alcoholism but gifted with a wild desire for art. Pollock was not exactly New York high society material. He grew up poor, worked for the WPA, admired Navaho sand paintings and the Mexican muralists (whom Wollen considers North America’s only original modernists), and was a long-time student of the regionalist “American scene” painter Thomas Hart Benton. Later he studied directly with the muralist David Alfaro Siqueiros, an ardent Communist, who initiated him to the use of industrial paints purchased in a can at the hardware store. His art, as Wollen indicates for those whose eyes have been blinded by theory, bears little resemblance to the colorfield painters that the critic Clement Greenberg made into his peers, in texts that catapulted the painter to the heights of fame. Pollock did of course turn away from the figurative realism of Benton, who retreated to the Midwest and veered toward increasingly right-wing nationalist positions; but he did so via the Surrealism of Roberto Matta, which was anathema to Greenberg, and through the inevitably “literary” experience of psychoanalytic dream-interpretation, which he first encountered during a stint behind bars for drunken violence. There is more, but you get the point: the premier Abstract Expressionist had almost nothing to do with Greenberg’s rationalizing modernist aesthetic, which held that the arts should be “hunted back to their mediums,” and thereby “isolated, concentrated and defined.” In art as in life, Pollock was excessive.

Wollen discusses Greenberg mainly in terms of his purism, conceived as the sublimation of a “art for art’s sake” into the rigid doctrine of all-over treatment and flatness of the picture plane. He only briefly retraces the complex itinerary that led Greenberg from his prewar Trotskyism to the Kantian regulatory idealism that he ultimately proposed as an objective measure for abstract art. And he does not even hint at what a sociological perspective suggests so persuasively, namely that the metropolitan critic fulfilled a typically managerial role with respect to the working-class painter. But it doesn’t matter, because his narrative of the painter’s development is so penetratingly insightful. The breakthrough painting for Pollock, Wollen explains, was a work commissioned by Peggy Guggenheim for the wall of her private apartment, entitled Mural (1943). For this he imagined an intermediary between easel painting and what, for him, was the major form, that of Benton and the Mexican masters: al fresco wall painting, the great public socialist art of the 1930s. He made preparations, ripped out a partition in his studio to give himself room, but he could not begin the painting, not until just one day before it was to be delivered and inaugurated at a high-society party. First he painted a vision: a herd of animals surging violently across the canvas. As he later explained, the painting was “a stampede… every animal in the American West, cows and horses and antelopes and buffaloes. Everything is charging across that goddamn surface.” But then he literally covered over this regionalist vision with his own version of Surrealist automatic writing. As Wollen notes: “The formal inventiveness of Mural was the result of Pollock’s unreflective and trancelike conjuring up of images based on his childhood memories (or screen memories) and his subsequent secondary suppression (conscious censorship) of these intensely cathected images with ‘automatic’ scrawlings-through and overpainting. Thus the ‘all-over’ composition and the ‘flatness’ of the work come from the act of obliteration.” The result is an image of extreme tension, whose underlying content is cloaked and dissolved by an abstract pictorial code. What Wollen shows us in the painting of Jackson Pollock is the application of a paradoxical containment strategy, a restrictive overlay that at once encloses and releases a boundlessly expansive energy. The very act of invention, of emancipation, becomes a historically layered formulary of struggle.

To see how an impassioned force of artistic expression can be channeled into a social formation so entirely foreign to its own origins is to begin to understand how the process of hegemonic integration works at the molecular level. In the 1950s, Pollock would become the centerpiece of CIA campaigns to promote the liberal American values of individualism and free exchange. While his peers were pilloried for their youthful communist sympathies, Pollock was transformed into a symbol of the American dream, which is the power to dream beyond history. What gets lost in this abstractive celebration of freedom is everything that gave it flesh in reality. Wollen pays fitting homage to Pollock’s apotheosis:

Worst of all, he was crowned the king of American painting in a triumphalist wave of nationalism and political manipulation of art. The “ideologically innocent” art desired by Greenberg was inverted into an art of imperial propaganda. It was a strange and tragic fate for a great artist, who spent nights on the street in a drunken stupor, fought with the cops on demonstrations, haunted the Museum of Natural History in reverent contemplation of the art of Native Americans, scoured the beach for detritus to fling down into his paint-encrusted canvas, loved the work of El Greco and Goya, played Exquisite Corpse in a Surrealist salon, was thrown off the Federal Art Project as a Red, and wrestled all his life with childhood memories and philosophical conundrums that remained convulsive to the last, resistant to containment, regulation and good order.

Touch the Ruins

The Fordist hegemony ended where it began, in Detroit, in the summer of 1967. Two black soldiers just back from their tours of duty in Vietnam were celebrating with a group of revelers in a clandestine after-hours bar known as a “blind pig.” The cops raided the joint and roughed up the vets and their friends. A typical racist incident turned into one of the largest and most destructive uprisings in US history. Enraged blacks became snipers, firing hunting rifles from the roofs of apartment buildings. The rebellion went on for three days while the city burned. Johnson sent in Army troops. Now a large number of soldiers returning from Southeast Asia were faced with a guerrilla movement in the cradle of the American auto industry. Similar scenes were repeated later that summer in Newark, then in over a hundred cities in 1968, after the murder of Martin Luther King. New Deal liberalism took a decisive blow. The passive revolution was finally over. An atmosphere of looming civil war that brought Richard Nixon to power and made him the most reactionary president in US history. Hegemony’s ruins and the new ways of life that have flowered in its aftermath are both still to be found in the city of Detroit, an urban world of warmth, compassion, creativity and humor which fell under the control of an Emergency Financial Manager in 2013, five years in to the present crisis.